1. In a Zume Pizza delivery truck that uses a combination of robots, AI, and GPS in pizza preparation and delivery, what will be capitalized versus expensed?
Original blog posting (March 7, 2017)

2. Zume Pizza Based in Mountain View, California
Pizza truck holds 56 ovens that are connected to ordering system and GPS
Robots help make the pizzas
Pizzas are put in the oven four minutes before truck reaches the customer’s house

3. Zume Pizza started in Mountain View, California

4. Zume Pizza truck

5. Plain white panel trucks are customized to become Zume Pizza trucks
Source of plain Chevy Spark photo:

6. Customer orders pizza

7. Humans toss the dough, cut vegetables, and put on toppings

8. Robots put on pizza sauce

9. Truck has 56 ovens. Each oven is connected to order system and GPS

10. Robots put pizzas in oven exactly four minutes before truck reaches the house

11. Humans pull out pizza and put it into the cutter

12. Pizza is delivered

13. Question 1
Would Zume capitalize or expense the cost of the white panel truck itself?

14. Question 2
Would Zume capitalize or expense the cost of the 56 pizza ovens inside the truck?

15. Question 3
Would Zume capitalize or expense the cost of the custom paint job on the exterior of the truck?

16. Question 4
If a Zume Pizza truck needs replacement tires after it has been driven 75,000 miles, is the cost of those tires capitalized or expensed by Zume? Why does it matter?

17. Question 5
What is the impact of capitalizing an item on the balance sheet? On the income statement?

18. Question 6
What is the impact of expensing an item on the balance sheet? On the income statement?

19. Question Recap
Would Zume capitalize or expense the cost of the white panel truck itself?
Would Zume capitalize or expense the cost of the 56 pizza ovens inside the truck?
Would Zume capitalize or expense the cost of the custom paint job on the exterior of the truck?
If a Zume Pizza truck needs replacement tires after it has been driven 75,000 miles, is the cost of those tires capitalized or expensed by Zume? Why does it matter?
What is the impact of capitalizing an item on the balance sheet? On the income statement?
What is the impact of expensing an item on the balance sheet? On the income statement?

20. For additional news stories to use in the accounting classroom, see the Accounting in the Headlines blog at Questions or comments? Contact Dr. Wendy Tietz at